May 24 (Bloomberg) -- Hawker Beechcraft Corp., the private-aircraft manufacturer owned by Goldman Sachs Group Inc. and Onex
Corp., said it’s in negotiations about a joint venture that
could lead to the production of planes in China.

The U.S. company has been in talks since January over a
deal that may ultimately see it transfer technology to win a
bigger slice of sales in the fastest growing major economy,
Chief Executive Officer Bill Boisture said in an interview.

“I’ve been there three times since the first of the year
and there are serious discussions about potential joint
ventures,” Boisture said. While there are “real possibilities,”
talks are at an early stage and a deal may initially focus on
joint sales, followed by production of parts and then final
assembly “over the next 10 years,” the executive said in London.

China probably has more than 400 dollar billionaires and
55,000 individuals worth at least $15 million, according to the
Hurun Rich List. That wealth is likely to stimulate demand for
600 corporate jets in the country through 2019, according to
Bombardier Inc., the world’s biggest maker of business aircraft.

Technology Issue

There is “always” going to be lots of discussion on exactly
what technology can be given up, the executive said, especially
since the company is more used to expertise flowing its way.

“We’ve imported the Hawker product from England to a large
North American market and we imported the Mitsubishi product
from Japan that became the Hawker 400,” he said. “So we’ve
done the process in reverse and have that learning behind us.”

China could contribute 20 percent of Hawker Beechcraft’s
sales within two decades as the economy grows and the state
funds more airports with business-aircraft facilities after
previously focusing on accommodating larger commercial planes.

A venture is most likely to focus on the company’s jet
models, such as the twin-engine Hawker 900XP, an 11-seater which
cruises at more than 500 miles (805 kilometers) per hour and
recorded 28 sales last year. Its most popular plane is the 360-mph Beechcraft King Air turboprop, with 114 sales in 2010.

About 40 percent of group sales are to public and private
businesses, Boisture said, with upwards of 35 percent to wealthy
individuals and the rest to governments.

Local Trends

Hawker Beechcraft, bought by Goldman and Onex for $3.3
billion in 2006, with each owning 49 percent stakes, also aims
to spur sales in China, India, Russia, the Middle East and
Africa by adapting models to local fashion, Boisture said.

Interiors will be crafted to feature grays, blues and
burnished aluminum rather than the heavy woods, thick carpet and
gold trimmings favored by North American customers, he said.

The next step will be to make its aircraft easier to fly,
reflecting a lack of highly trained pilots in emerging markets.
Work on simplified avionics is under way with Rockwell Collins
Inc., Honeywell International Inc. and Garmin Ltd., he said.

“We have to pay attention to design and simplification of
the product,” he said. “You’re going to see flat-screen displays
and intuitive icons to get across the language barrier.”

Hawker Beechcraft’s management holds a 2 percent stake in
the company, which has sites in Little Rock, Arkansas, Chihuahua
in Mexico and Chester in the U.K., as well as Wichita and Salina
in Kansas, with the latter facility earmarked for closure.

Low prices for used aircraft are continuing to hurt sales
of the latest models, Boisture said, with planes less than five
years old selling for 25 percent below the cost of new ones.

“We’re looking for a return to a positive pricing
environment in 2012,” he said. “Once we see firmness in pricing
we’ll see some scarcity and we can improve volumes. It will take
most of 2012, if the forecasters are right.”